Economic Base Theory

Economic Base Theory posits that a region's economic growth is primarily driven by its external activities, or "basic" industries, which produce goods or services for outside markets. These industries bring in income and jobs, stimulating local demand for non-basic, or "service" industries, such as retail and healthcare. Essentially, the theory emphasizes that by focusing on attracting and supporting basic industries, a community can enhance its overall economic health and development. Thus, the success of a region's economy depends significantly on its ability to expand these external markets.